DUoS charges explained: red band, capacity and what a battery can cut

On a half-hourly metered site, the energy itself is only part of what you pay. Layered on top are the costs of moving that energy through the local network — Distribution Use of System, or DUoS — plus capacity charges for the connection you hold. Understanding the shape of those charges is what separates a battery that pays back from one that does not. Whether those charges make a battery worthwhile is one of six checks in our guide to buying commercial battery storage.

The two parts that matter

Time-banded unit charges. Distribution unit charges are split into red, amber and green bands. Red covers the weekday peak and costs the most per kWh; green covers nights and weekends and costs the least; amber sits between them. Every kWh you move out of red and into green is charged at a lower rate.

Capacity charges. Half-hourly sites agree a capacity with the network in kVA and pay for it as a standing charge, used or not, with excess charges if you go past it. That makes a short, sharp peak expensive twice over: it lands in the red band, and it sets the capacity you must reserve.

Find your own red band hours

Red band hours are not national. They are set for each distribution licence area in that network operator's published charging statement, and they can change between charging years. Anyone who tells you the red band is the same everywhere is guessing.

Three ways to get yours: ask your supplier for the DUoS bands applied to your supply; look up the current Use of System charging statement published by your network operator; or read them off a fully itemised bill, which some suppliers break out by band. If you do not know which operator covers your site, check a postcode against an industry grid supply point lookup rather than assuming from the county — network boundaries do not follow county lines.

What the Targeted Charging Review changed

Ofgem's Targeted Charging Review decided that residual network charges — the part that recovers the cost of existing infrastructure rather than the cost of your behaviour — would be recovered through fixed charges, with customers placed in bands. Its decision put it plainly: "Residual charges will be levied in the form of fixed charges for all households and businesses."

The practical consequence for large users arrived with the transmission changes in April 2023. Classic triad avoidance, where a site cut demand across a handful of winter evening peaks to reduce transmission residual charges, no longer produces the saving it once did, because that element is now a fixed charge banded by capacity. What remains firmly behaviour-based is distribution: the red band still costs more per kWh, and capacity charges still follow the capacity you reserve. That is where a battery earns.

The arithmetic on your own bill

You do not need a model to see the shape of the opportunity. Take a year of half-hourly data and do three things:

1. Total your red-band consumption. Sum the kWh that fall inside your area's red hours on weekdays. That is the pool a battery can move into cheaper hours.
2. Find your peak half-hour. The highest demand in the year, in kW, is what your agreed capacity has to cover. Compare it with the capacity you are paying for.
3. Count how often you approach that peak. If the site touches its maximum on a handful of half-hours a year, a modest battery can shave them; if it sits near maximum all afternoon, you need far more stored energy to make the same difference.

Those three numbers decide both the size of the battery and whether the case works at all. The method is set out in full on our cost and payback guide, and peak shaving covers how the discharge is scheduled.

How a battery actually cuts the charge

A commercial battery charges when distribution charges are low — overnight, at weekends, or from your own solar — and discharges through the red band. Three savings follow: the red-band units you no longer import, the peak demand you no longer set, and, where the peak reduction is reliable, the possibility of holding a lower agreed capacity. Reducing agreed capacity is a decision to take with the network operator rather than a switch to flip, because capacity given up may not be available later if the business grows.

Two cautions. Round-trip efficiency means you buy slightly more kWh than you discharge, so the saving is the price difference minus those losses. And if you also want the battery to hold charge for backup power, the reserved energy is not available for peak-shaving that day — a trade-off worth pricing rather than hiding.

Where this leaves a business case

DUoS is not a reason to buy a battery on its own. It is one of the stacked value streams — alongside load shifting, solar self-consumption and, on suitable sites, grid services revenue — and it is usually the most predictable of them, because it depends on your own consumption shape rather than on a market. A feasibility summary that cannot show you the red-band figure it used has not done the work. Connection questions that follow are covered on our G99 application page.